Less than one year after withdrawing its initial purchase offer, plastic compound and resin supplier A. Schulman Inc. is buying the majority of the assets of the specialty plastics business segment from Ferro Corporation for US$91 million in cash.
The purchase agreement includes four facilities located in the U.S. – sites in Stryker, Ohio; Evansville and Plymouth, Ind.; and Carpentersville, Ill. – as well as plastics operations in Castellon, Spain.
Excluded from the transaction are Ferro's plastics business and operations in Edison, N.J., and Carabobo, Venezuela.
The transaction is expected to close by August 31, 2014.
Headquartered in Mayfield Heights, Ohio, Ferro’s specialty plastics assets included in the sale achieved sales of US$154 million in 2013, with approximately two-thirds of these revenues generated in the U.S. The specialty plastics segment is a global supplier of custom engineered plastic compounds, colorants, and liquid coatings, primarily focused on thermoset plastic technology.
"Specialty plastics is a performance-driven, technically demanding business, and this business segment is what initially attracted us to seek to acquire Ferro back in 2013,” Joseph Gingo, Schulman’s chairman, president and CEO, said in a news release. “Strategically combining the two businesses provides the existing customers of the specialty plastics segment with an expanded product portfolio, technical solutions and global resources with the full support of the A. Schulman team.”
This will be Fairlawn, Ohio-based Schulman’s ninth acquisition completed over the past four years, in addition to three joint ventures. Gingo described the activity as the company continuing to execute its “aggressive growth strategy driven by organic growth and acquisitions.”
“As we stated at our recent investor day, our goal is to gain $100 million in sales annually through acquisitions. While this large bolt-on acquisition exceeds that target, it more importantly is an excellent strategic fit with A. Schulman and provides us with an expanded geographic reach not only in the United States but also in Spain,” Gingo said in the release. “Through our successful execution of our dual approach strategy, we are improving our position in target markets, diversifying our product mix and increasing our prospects for sustainable and profitable growth.”